Nedlac-led study expresses fear that substantial improvements made in operational efficiencies may lead to job cuts
EMPLOYMENT numbers in the automotive components sector have increased 4% a year in the past three years.
This is among the findings of a study led by the National Economic Development and Labour Council (Nedlac), the vehicle manufacturers association Naamsa says in its annual report, released yesterday.
The association also says in the report that there "have been employment losses" in the vehicle production and supply sector since 1996.
"The overall conclusion is that automotive industry employment levels have, in fact, been stable in recent years and that the automotive components industry have shown employment growth," says the Naamsa report.
This implies that job losses have occurred at vehicle assembly plants and that these were offset by jobs created by component makers. Employment is a highly controversial subject in the sector, which has often been under fire for seeming to shed jobs. Part of the problem is that accurate and updated data are not available.
Naamsa says the findings of the Nedlac study are consistent with data obtained from the industry's own survey.
The Nedlac study found that the headcount of permanent employees in the components sector increased from 67199 in 1999 to 74043 last year.
"It's not surprising, also because there have been quite a few investments in the components sector," says Duane Newman of Deloitte & Touche.
"The only surprise is that this is quite a few new jobs."
In a comment that suggests there could be further job cuts lurking in the industry, Naamsa says the industry continues to face the challenge of further substantial improvements in operational efficiencies.
"Further fundamental restructuring and rationalisation are expected to take place against the background of the domestic and international realities facing the industry, including trade liberalisation (and) globalisation," the report says.
Meanwhile, the rand's appreciation and a general slowdown in global markets led Naamsa to forecast modest growth at best for vehicle and components exports this year.
The report shows that the industry grew substantially in terms of revenues last year, boosted by more exports in the weak rand environment. The value of vehicle and component exports rose steeply to R40bn, up from about R30bn in 2001.
Capital expenditure by the industry was expected to total about R15bn over the next five years. Industry investment this year is forecast to reach R3,1bn, up from R2,7bn last year.
The report also shows that the domestic vehicle industry retained its status as the 18thlargest car producer in the world.
This was despite a drop of about 1700 units in production last year from a record high of 406149 units in 2001.
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